Analysis: Nuclear-powered oil sands

WASHINGTON, March 30 (UPI) -- Nuclear companies and those mining Canada's oil sands are poised to team up to separate crude from deep Earth and pump it to the surface.

Reactors are being pushed as a more economical and environmentally friendly alternative to the natural gas now used to fuel oil-sands projects, but the stigma of nuclear energy -- and its ability to do the job -- remain an obstacle.

The high price of crude makes oil sands attractive to develop, a process where hydrocarbons mixed with sand, water and clay over millions of years and under the Earth's pressure are extracted, separated, refined to a synthetic oil and sent to market.

"It's quite energy intensive," Jeffrey Collins, director of Global Oil for Cambridge Energy Research Associates, told United Press International. "There is still a strong gain positively in terms of the amount of energy you're able to get out of it versus the energy you use."

Canada is the world's seventh-largest oil producer at 3.1 million barrels per day and the No. 1 supplier for the United States. Most of Canada's production is from conventional crude, but "the vast majority of Canada's reserves are actually in oil sands" in an area the size of Florida, Collins said. More than 1 million bpd of Canada's oil is from sands. That could triple in 10 years.

But as sands production increases, so does its demand for energy, mostly supplied by natural gas.

The Energy Information Administration, the data arm of the U.S. Energy Department, predicts demand for natural gas in North America alone will increase by 1.1 a year through 2030. Canada's appetite jumped 1.9 percent in 2003. Canada's reserves are the 17th-largest in the world, but the EIA predicts a net decrease in production through 2030.

Canada would surpass Saudi Arabian levels if its sands reserves were booked as part of total reserves. Venezuela also has massive amounts of oil sands, though less developed than Canada. Oil from sands could be more competitive with conventional crude if it could be pumped and processed faster.

"They use energy to recover the material and to process the material," Collins said, adding future technologies may turn some waste products from today's sands process to an energy feedstock for operations. Nuclear plants, despite being more capital intensive to build, may take natural gas's place. And Canada's nearby uranium reserves, some of the largest and richest in the world, could be processed and be ready fuel.

"Nuclear power plants can address several issues," Collins said. "You could try to reduce the amount of (carbon dioxide) emissions because you don't have to burn as much hydrocarbons, i.e., natural gas, to generate the steam and electricity or to create hydrogen that can be used in the upgrading processes.

"And you'd have a near zero emitter from a nuclear power plant. So that's the clean-energy side of it."

The World Nuclear Association estimates natural gas is 60 percent of an oil-sands facility's operating costs. But the price of natural gas jumped 6 percent in the past week alone, to $7.56 per thousand cubic feet, down from the $8.51 average last year and well above the $2 levels of the 1980s and 1990s.

"The natural gas now is freed up," Collins said. "It could be exported to markets in the rest of Canada and even the United States at relatively premium prices."

There are still a number of roadblocks to clear, at least before Canadian sands are powered by nuclear reactors. Canada's Alberta province, where nearly all its sands are located, has never had any nuclear power. It would likely need the general approval of the community, including a large indigenous population.

The Canadian House of Commons' Committee on Natural Resources issued a report this month entitled, "The Oil Sands: Toward Sustainable Development," in which it put a hold on nuclear energy "until the repercussions of this process are fully known and understood."

The report cited worries over the waste produced by nuclear plants and questions about nuclear energy's ability to deliver the needed steam. And the committee was uncomfortable not knowing whether the sands would need one or numerous large reactors to power operations, or an even greater number of smaller models.

There are two types of oil-sands operations. The more shallow deposits are harvested in a strip-mining-style, where Earth is peeled back and massive trucks and shovels remove the wanted product. It's then super-heated with water or steam, and the molasses or tar-like bitumen is removed.

"Right now mining is the largest component, more than 60 percent of production of oil sands," Collins said. "More than 80 percent of global reserves" are too deep for mining "the low-hanging fruit."

Two primary technologies -- called "in situ" (Latin for "in place") -- have been developed for deep extraction.

Cyclic Steam Stimulation uses high-pressure steam delivered through pipes to heat up the heavy bitumen, which is brought to the surface.

For Steam Assisted Gravity Drainage, a method gaining in popularity, Collins said, two parallel pipes are drilled vertically and then jut in a 90-degree angle. The top pipe injects steam, and the one below collects the bitumen and draws it to the surface.

Both in situ and surface mining bitumen needs further intensive processing and upgrading so that it is capable of being refined or sent away in a pipeline.

A number of nuclear companies, led by Energy Alberta, which has plans to bring two reactors online to power sands operations by 2017, are looking to provide the energy needed for such projects.

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